CIT Vs Zebra Technologies Asia Pacific Pet Ltd (Delhi High Court)
Delhi High Court held that the assessee was not afforded an opportunity to counter the allegation that it was a conduit company without any substance. Thus, the appeal filed by the revenue dismissed.
Facts- The assessee is a company which is incorporated under the laws of Singapore and is a tax resident of Singapore. The assessee claimed that it is engaged in the business of wholesale distribution of electronic products as well as services related to after sales, repairs, and technical support services to the customers in various parts of the world including India. During the period, the assessee had received a sum of ₹19,52,78,490/- for rendition of technical support, repair, and maintenance services. In addition, it has also received the amount of USD $2,09,19,539/- from off-shore sales of products.
The assessee had filed its income tax returns claiming that it was not liable to pay tax in respect of the aforesaid receipts. According to the assessee, it did not have a permanent establishment (PE) in India and had also not made available technical knowhow, knowledge, and skill to the Communication Test Design Indian Pvt. Ltd. (CTDIPL). Therefore, the aforesaid income was not chargeable to tax in India under the Act by virtue of the DTAA.
